Correlation Between Coloray International and SK Square
Can any of the company-specific risk be diversified away by investing in both Coloray International and SK Square at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Coloray International and SK Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and SK Square Co, you can compare the effects of market volatilities on Coloray International and SK Square and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Coloray International with a short position of SK Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and SK Square.
Diversification Opportunities for Coloray International and SK Square
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coloray and 402340 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and SK Square Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Square and Coloray International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Coloray International Investment are associated (or correlated) with SK Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Square has no effect on the direction of Coloray International i.e., Coloray International and SK Square go up and down completely randomly.
Pair Corralation between Coloray International and SK Square
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 0.61 times more return on investment than SK Square. However, Coloray International Investment is 1.63 times less risky than SK Square. It trades about -0.18 of its potential returns per unit of risk. SK Square Co is currently generating about -0.13 per unit of risk. If you would invest 65,600 in Coloray International Investment on September 1, 2024 and sell it today you would lose (6,600) from holding Coloray International Investment or give up 10.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Coloray International Investme vs. SK Square Co
Performance |
| Timeline |
| Coloray International |
| SK Square |
Coloray International and SK Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and SK Square
The main advantage of trading using opposite Coloray International and SK Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, SK Square can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SK Square will offset losses from the drop in SK Square's long position.| Coloray International vs. LG Chem | Coloray International vs. Chunbo Co | Coloray International vs. Hyosung Chemical Corp | Coloray International vs. LIG ES SPAC |
| SK Square vs. Sangsin Energy Display | SK Square vs. Innowireless Co | SK Square vs. Nice Information Telecommunication | SK Square vs. Digital Power Communications |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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